ALL issues relating to the bond issue and club finances

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Bloody hell. Anders and GCHQ were nearly having "a moment" there and peterstorey comes in banging on about Arsenal's EBITDA for some reason.

Get out of the road, man! Arsenal, yeah, whatever... just whap your willies out and measure them then we can get back to the unlikeliest love story on the Caf.
 
GCHQ said:
That was group turnover. £157m was from the property business. Their football turnover actually fell by £2m to £223m from £225m the previous year. Their football business financials really weren't anything to write home about in 09/10. Chelsea are going to be the same.
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I think our football turnover went down due to much fewer games at the Emirates - we were always drawn away in the cups which cost us £4m a pop. If we'd had a few home games, it would have gone up. I know your point is much wider than that, I just thought I'd mention it.
 
MikeUpNorth said:
Well you are including the debt they took on associated with the new stadium, so why would you not include the profit they made on the development and sale of the old stadium?
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I've included the stadium debt finance costs because ultimately it's going to be the football business which has to pay those costs for many years to come.

The comparison between the two clubs simply has to be based on football activities alone. Deloitte don't inlcude Arsenal's property income in their annual football finance report for a good reason.

You want to be looking at Turnover, EBITDA, Staff costs and cash available after servicing of finance.

There's a rather common trend across all four of those items when you're making a comparison between Manchester United and Arsenal.
 
GCHQ said:
Rather odd that nobody asked about the carve-out for the PIKs. How many questions were there roughly?

I noticed in the presentaion of results that there was a £2.6m reduction in matchday revenue which wasn't related to weaker playing performance (ie fewer home games). Matchday comprises quite a number of different revenue streams but you would imagine that reduced exec income makes up the majority of that deficit.

Negative interest rate fluctuations since the talk of the overseas deal doubling would account for part of the reduction but it's hard to explain how the improvement has gone from 100% to 55%.

The Bloomberg thing is classic Glazer behaviour. It was a predominantly very positive story and they'd still rather keep it secret rather than let people know about it. They must absolutely hate you for digging your way through US mortgage filings! ;)
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Four or five questions. One American asking for details of the Thomas Cook deal (demonstrating total ignorance about its importance). One about exec sales, not really answered, one about squad investment ("nothing to worry about" of course). I forgot the others and don't have my notes to hand.

You're right about Matchday weakness. Given we know number of games, matchday income and attendances, I think looking at yield per occupied seat gives a good flavour for exec/normal fan mix and prices.

2008/09
Avg attendance for 30 games was 73,248
Matchday revenue was £108.799m
Therefore yield per occupied seat was £49.51

2009/10
Avg attendance for 28 games was 73,249 (one person more!)
Matchday revenue was £100.164m
Therefore yield per occupied seat was £48.84

That's a 1.4% fall in yield, which isn't much but ticket prices went UP by 2.9% last season compared to the previous one. The lack of a CL semi (premium pricing) makes a difference, but it still looks to me like exec sales were weak, hence the yield falling rather than rising.

Incidentally, City's yield per seat is £23.16, Arsenal's is £58.21, Liverpool's (2008/9) £36.81 and Chelsea's (also 2008/9) £64.91!
 
GCHQ said:
I've included the stadium debt servicing costs because ultimately it's going to be the football business which has to pay those costs for many years to come.

The comparison between the two clubs simply has to be based be done on football activities alone. Deloitte don't inlcude Arsenal's property income in their annual football finance report for a good reason.

You want to be looking at Turnover, EBITDA, Staff costs and cash available after servicing of finance.

There's a rather common trend across all four of those items when you're making a comparison between Manchester United and Arsenal.
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Ok. If you can't beat 'em join 'em.

Do Arsenal plan on selling any more players to City in order to boost their figures?
 
TheMancRedDevil said:
Bloody hell. Anders and GCHQ were nearly having "a moment" there and peterstorey comes in banging on about Arsenal's EBITDA for some reason.

Get out of the road, man! Arsenal, yeah, whatever... just whap your willies out and measure them then we can get back to the unlikeliest love story on the Caf.
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It's only because he's finally been open and honest about the irrelevance of the non-cash items. And I'm not saying that he's ever included them before, he hasn't, but what he hasn't done up until yesterday is explain why those items should be excluded. There's a big, very important difference.

Oddly enough we did start on good terms as it happens.
 
GCHQ said:
I've included the stadium debt finance costs because ultimately it's going to be the football business which has to pay those costs for many years to come.

The comparison between the two clubs simply has to be based on football activities alone. Deloitte don't inlcude Arsenal's property income in their annual football finance report for a good reason.

You want to be looking at Turnover, EBITDA, Staff costs and cash available after servicing of finance.

There's a rather common trend across all four of those items when you're making a comparison between Manchester United and Arsenal.
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As Mike pointed out the stadium is self-financing due to the property deals therefore it's perverse to include the interest payments and exclude the revenue generating elements - you might as well exclude your much touted commercial ops as 'non-football'.
 
Well they couldn't afford the £60M this year and he isn't getting any cheaper. We don't need £80M to make our numbers look better.
 
GCHQ said:
It's only because he's finally been open and honest about the irrelevance of the non-cash items. And I'm not saying that he's ever included them before, he hasn't, but what he hasn't done up until yesterday is explain why those items should be excluded. There's a big, very important difference.

Oddly enough we did start on good terms as it happens.
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I don't think I have been anything other than "open and honest" on these points but there you go, we can agree to disagree.

You got angry because you felt the "United made a loss when we didn't really" point was very important and I wasn't mentioning it. I started writing in January from a totally different perspective, that the costs of ownership are and will be outrageously high and that that is wrong. I didn't really care about the 2008/09 figures, it was all about the bond etc for me.

Anyway, this week it IS about the results and absolutely, it is worth pointing out that we aren't going bust and loads of the red ink are either one-offs or irrelevant accounting charges.
 
peterstorey said:
As Mike pointed out the stadium is self-financing due to the property deals therefore it's perverse to include the interest payments and exclude the revenue generating elements - you might as well exclude your much touted commercial ops as 'non-football'.
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The annual c.£20m stadium debt finance costs will continue for the foreseeable future. You've only just repaid all the property related debt associated with the Highbury Square development so your claim that the stadium is self financing due to the property deals is nonsense.
 
andersred said:
I don't think I have been anything other than "open and honest" on these points but there you go, we can agree to disagree.

You got angry because you felt the "United made a loss when we didn't really" point was very important and I wasn't mentioning it. I started writing in January from a totally different perspective, that the costs of ownership are and will be outrageously high and that that is wrong. I didn't really care about the 2008/09 figures, it was all about the bond etc for me.

Anyway, this week it IS about the results and absolutely, it is worth pointing out that we aren't going bust and loads of the red ink are either one-offs or irrelevant accounting charges.
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Woah. Plate tectonics in action here, methinks.
 
GCHQ said:
The annual c.£20m stadium debt finance costs will continue for the foreseeable future. You've only just repaid all the property related debt associated with the Highbury Square development so your claim that the stadium is self financing due to the property deals is nonsense.
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There are more flats to be sold and a whole new development to come. Meanwhile you need to carve out £200M to pay down the PIKS (if part of that hasn't already happened).
 
andersred said:
Simmer down!
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I dunno mate. I sense a slight (read: significant) shift in your position here.

The movable force has met the immovable object.

I might be wrong but if I'm right, it would be welcome news. I don't envisage that you will join the "dark side" any time soon but a fairer, more objective Anders would be of enormous benefit to the club, the fans and the dumbass media.
 
Where do we go from here in your opinion Anders? As you've said, clearly we aren't going bust and the finances seem solid, but yet the cost of the Glazer's takeover and debt has taken significant money out of the club and will continue to do so. The question is what do we, as fans, do (if anything)?

My instinct says that, given the high value of the club, trying to force the Glazers out (if that could even be done) would only be likely to bring another leveraged takeover and all the costs, and perhaps even more debts, that come with it. As we saw with the Red Knights, and Liverpool's failure to find a sugardaddy, the cost of buying the club is simply too high for a benevolent takeover to not be funded by debt.

Are you still advocating the fans taking measures to try and force the owners out, or are we now in a position of unfortunately having to accept where we are, albeit not stop making our displeasure with the situation known?
 
TheMancRedDevil said:
I dunno mate. I sense a slight (read: significant) shift in your position here.

The movable force has met the immovable object.

I might be wrong but if I'm right, it would be welcome news. I don't envisage that you will join the "dark side" any time soon but a fairer, more objective Anders would be of enormous benefit to the club, the fans and the dumbass media.
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Thanks, you Judas Glazer loving apologist. :D

That feels better.
 
MikeUpNorth said:
Where do we go from here in your opinion Anders? As you've said, clearly we aren't going bust and the finances seem solid, but yet the cost of the Glazer's takeover and debt has taken significant money out of the club and will continue to do so. The question is what do we, as fans, do (if anything)?

My instinct says that, given the high value of the club, trying to force the Glazers out (if that could even be done) would only be likely to bring another leveraged takeover and all the costs, and perhaps more even more debts, that come with it. As we saw with the Red Knights, and Liverpool's failure to find a sugardaddy, the cost of buying the club is simply too high for a benevolent takeover to not be funded by debt.

Are you still advocating the fans taking measures to try and force the owners out, or are we now in a position of unfortunately having to accept where we are, albeit not stop making our displeasure with the situation known?
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That's one hell of a question to put to Anders, Mike.
 
andersred said:
Four or five questions. One American asking for details of the Thomas Cook deal (demonstrating total ignorance about its importance). One about exec sales, not really answered, one about squad investment ("nothing to worry about" of course). I forgot the others and don't have my notes to hand.

You're right about Matchday weakness. Given we know number of games, matchday income and attendances, I think looking at yield per occupied seat gives a good flavour for exec/normal fan mix and prices.

2008/09
Avg attendance for 30 games was 73,248
Matchday revenue was £108.799m
Therefore yield per occupied seat was £49.51

2009/10
Avg attendance for 28 games was 73,249 (one person more!)
Matchday revenue was £100.164m
Therefore yield per occupied seat was £48.84

That's a 1.4% fall in yield, which isn't much but ticket prices went UP by 2.9% last season compared to the previous one. The lack of a CL semi (premium pricing) makes a difference, but it still looks to me like exec sales were weak, hence the yield falling rather than rising.

Incidentally, City's yield per seat is £23.16, Arsenal's is £58.21, Liverpool's (2008/9) £36.81 and Chelsea's (also 2008/9) £64.91!
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Yup, you would expect that the ongoing improvements to the hospitality facilities will help matters but it's going to remain ''challenging'' for a good few years yet I would imagine.
 
MikeUpNorth said:
Where do we go from here in your opinion Anders? As you've said, clearly we aren't going bust and the finances seem solid, but yet the cost of the Glazer's takeover and debt has taken significant money out of the club and will continue to do so. The question is what do we, as fans, do (if anything)?

My instinct says that, given the high value of the club, trying to force the Glazers out (if that could even be done) would only be likely to bring another leveraged takeover and all the costs, and perhaps more even more debts, that come with it. As we saw with the Red Knights, and Liverpool's failure to find a sugardaddy, the cost of buying the club is simply too high for a benevolent takeover to not be funded by debt.

Are you still advocating the fans taking measures to try and force the owners out, or are we now in a position of unfortunately having to accept where we are, albeit not stop making our displeasure with the situation known?
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The Red Knights just have a different view on what the club is worth from the Glazers and therein lies the problem. I agree with the RKs analysis, I can't possibly see how 15x EBITDA is the right valuation for United and I believe eventually that will be proved correct (i.e. there won't be the pot of gold at the end of the rainbow). If I (and the RKs) are correct about that then of course there could be a change of ownership. The Glazers are in it for the money (I think we can all agree on that) and if they see value maximised by selling they'll sell.

Regardless of that, a full leveraged buyout of a major English football club just isn't possible any more. The markets wouldn't lend to support it.

Can the fans influence the situation, in theory of course they can. In practice? I don't know.

There is something I've heard in the last 24 hours that makes me think the situation is more fluid that you might imagine. I know that's a crappy thing to put on a forum without saying what it is but I need to check it out first. Watch this space next week!

The fat lady has barely cleared her throat yet....
 
andersred said:
The Red Knights just have a different view on what the club is worth from the Glazers and therein lies the problem. I agree with the RKs analysis, I can't possibly see how 15x EBITDA is the right valuation for United and I believe eventually that will be proved correct (i.e. there won't be the pot of gold at the end of the rainbow). If I (and the RKs) are correct about that then of course there could be a change of ownership. The Glazers are in it for the money (I think we can all agree on that) and if they see value maximised by selling they'll sell.

Regardless of that, a full leveraged buyout of a major English football club just isn't possible any more. The markets wouldn't lend to support it.

Can the fans influence the situation, in theory of course they can. In practice? I don't know.

There is something I've heard in the last 24 hours that makes me think the situation is more fluid that you might imagine. I know that's a crappy thing to put on a forum without saying what it is but I need to check it out first. Watch this space next week!

The fat lady has barely cleared her throat yet....
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Does that answer your question, Mike? :lol:
 
andersred said:
I don't think I have been anything other than "open and honest" on these points but there you go, we can agree to disagree.

You got angry because you felt the "United made a loss when we didn't really" point was very important and I wasn't mentioning it. I started writing in January from a totally different perspective, that the costs of ownership are and will be outrageously high and that that is wrong. I didn't really care about the 2008/09 figures, it was all about the bond etc for me.

Anyway, this week it IS about the results and absolutely, it is worth pointing out that we aren't going bust and loads of the red ink are either one-offs or irrelevant accounting charges.
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I appreciate that you had other things to focus on but for you to not once address the ridiculously misleading, ''would have lost money without the sale of Ronaldo'' myth, on your Manchester United related finance blog, was outrageous given how much was made of it by the media. I know you won't admit it but you didn't address it because it all helped to add fuel to the fire that was raging. Understandable but certainly not open and honest.
 
GCHQ said:
I appreciate that you had other things to focus on but for you to not once address the ridiculously misleading ''would have lost money without the sale of Ronaldo'' myth on your Manchester United related finance blog, was outrageous in my opinion given how much was made of it by the media. I know you won't admit it but you didn't address it because it all helped to add fuel to the fire that was raging. Understandable but certainly not open and honest.
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You and I have done this argument to death. I started doing this because of the bond prospectus and the costs/potential future costs it described. Bottom line is that I choose what to write about.

If you feel that this is such a key issue and deserves greater attention go and publicise that opinion. The web is great for that sort of stuff and journalists love having their work done for them, I should know.

It seems to me that you resent the fact that my stuff (and agenda) gets so much attention. Rather than grumbling about that on here or on my blog, why not go out and inform the world about what they are missing?
 
andersred said:
There is something I've heard in the last 24 hours that makes me think the situation is more fluid that you might imagine. I know that's a crappy thing to put on a forum without saying what it is but I need to check it out first. Watch this space next week!
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Am I allowed to have a guess at this on here Anders? :nervous:
 
GCHQ said:
Yes, so we keep being told...

There's not much operating profit left to come from the property business. £20m tops I'd say.
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There are about 100 flats in Highbury Sq to sell which nets about £50M (all upside). Then there's Queensland Road which will have over 700 residential units + other schemes.
 
andersred said:
The Red Knights just have a different view on what the club is worth from the Glazers and therein lies the problem. I agree with the RKs analysis, I can't possibly see how 15x EBITDA is the right valuation for United and I believe eventually that will be proved correct (i.e. there won't be the pot of gold at the end of the rainbow). If I (and the RKs) are correct about that then of course there could be a change of ownership. The Glazers are in it for the money (I think we can all agree on that) and if they see value maximised by selling they'll sell.

Regardless of that, a full leveraged buyout of a major English football club just isn't possible any more. The markets wouldn't lend to support it.

Can the fans influence the situation, in theory of course they can. In practice? I don't know.

There is something I've heard in the last 24 hours that makes me think the situation is more fluid that you might imagine. I know that's a crappy thing to put on a forum without saying what it is but I need to check it out first. Watch this space next week!

The fat lady has barely cleared her throat yet....
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Eek. Talk about whetting the appetite!
 
andersred said:
Free country mate.

Or is it? :cool:
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OK. I have had just under 24 hours to think about this one and this is what I have come up with... let me know if warm, cold or fecking freezing, ok?

Someone, somewhere, possibly a lender on one of the First Allied properties has become a little pissed off with the Glazers and their defaulting ways and have taken them to court or got some kind of injunction thingy having got wind of the fact that they could soon be in possession of a cool £95million.

If the Glazers took their £95million from United, this lender would get first dibs.

This is why they haven't taken the money - because they wouldn't be able to do with it what they wanted to do with it (i.e. pay off their PIKs).
 
peterstorey said:
There are about 100 flats in Highbury Sq to sell which nets about £50M (all upside). Then there's Queensland Road which will have over 700 residential units + other schemes.
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Put a sock in it Storey, you're well placed but it's not the garden of fecking Eden.

To quote Arsenal's report and accounts.

As we look further ahead we must be mindful of the fact that the property profits and cash flows which have boosted the Group’s 2009/10 results, as well as the additional returns from property we can expect over the next couple of years, are essentially one‐off in nature. Longer term growth in revenue, profits and cash for investment in the team, to a level which differentiates us from our competitors, will need to come from the core football business and, in particular, from the development of our commercial revenues.
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TheMancRedDevil said:
OK. I have had just under 24 hours to think about this one and this is what I have come up with... let me know if warm, cold or fecking freezing, ok?

Someone, somewhere, possibly a lender on one of the First Allied properties has become a little pissed off with the Glazers and their defaulting ways and have taken them to court or got some kind of injunction thingy having got wind of the fact that they could soon be in possession of a cool £95million.

If the Glazers took their £95million from United, this lender would get first dibs.

This is why they haven't taken the money - because they wouldn't be able to do with it what they wanted to do with it (i.e. pay off their PIKs).
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That would be great but no. I better not play this game, it'll end in tears...! Night all.
 
TheMancRedDevil; said:
OK. I have had just under 24 hours to think about this one and this is what I have come up with... let me know if warm, cold or fecking freezing, ok?

Someone, somewhere, possibly a lender on one of the First Allied properties has become a little pissed off with the Glazers and their defaulting ways and have taken them to court or got some kind of injunction thingy having got wind of the fact that they could soon be in possession of a cool £95million.

If the Glazers took their £95million from United, this lender would get first dibs.

This is why they haven't taken the money - because they wouldn't be able to do with it what they wanted to do with it (i.e. pay off their PIKs).
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All the properties will be ring fenced in separate entitities so this is an impossible scenario. In the cases of default the lender gets the security on the loan, ie the property.
 
andersred said:
Put a sock in it Storey, you're well placed but it's not the garden of fecking Eden.

To quote Arsenal's report and accounts.
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Well we haven't got some cnut bleeding the club dry so it's more like Heaven than Hell. The key bit I was pointing out to your new pal was.. 'the additional returns from property we can expect over the next couple of years'.. none of which are being 'carved out', of course.
 
datura said:
All the properties will be ring fenced in separate entitities so this is an impossible scenario. In the cases of default the lender gets the security on the loan, ie the property.
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Yeah. To be honest, that is what I thought too but it was all I could come up with. I just received a tantalising email from someone who will remain anonymous last night and it has been bugging me ever since! :D

Anders clearly has the same message so I will "watch this space" with interest.
 
TheMancRedDevil said:
OK. I have had just under 24 hours to think about this one and this is what I have come up with... let me know if warm, cold or fecking freezing, ok?

Someone, somewhere, possibly a lender on one of the First Allied properties has become a little pissed off with the Glazers and their defaulting ways and have taken them to court or got some kind of injunction thingy having got wind of the fact that they could soon be in possession of a cool £95million.

If the Glazers took their £95million from United, this lender would get first dibs.

This is why they haven't taken the money - because they wouldn't be able to do with it what they wanted to do with it (i.e. pay off their PIKs).
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They're all separate ltd entities. The lenders have no chance recovering money form Glazers other assets.

Again morally wrong, but...

Edit: Datura has said basically the same.
 
peterstorey said:
There are about 100 flats in Highbury Sq to sell which nets about £50M (all upside). Then there's Queensland Road which will have over 700 residential units + other schemes.
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There's more like £40m from the flats outstanding and it's not all operating profit, far from it. Impact to EBITDA will be c.£5m. Profit from the Queensland Road development will be something like £15m. You'll see the benefits in positive cashflow from now on but it's all so short-term and it's not really that much anyway.

See Anders' post for what you should really be focussing on.
 
GCHQ said:
There's more like £40m from the flats outstanding and it's not all operating profit, far from it. Impact to EBITDA will be c.£5m. Profit from the Queensland Road development will be something like £15m. You'll see the benefits in positive cashflow from now on but it's all so short-term and it's not really that much anyway.

See Anders' post for what you should really be focussing on.
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Any income from the flats from now on goes straight to the bottom line. Queensland Road is worth a min £150M to us over 3-5 years (costs already sunk).
 
Sultan said:
They're all separate ltd entities. The lenders have no chance recovering money form Glazers other assets.

Again morally wrong, but...

Edit: Datura has said basically the same.
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As an aside, I'm not sure it is morally wrong that lenders can't cannibalise separate entities. When you lend someone money you tie it to a security - a property for example - on the understanding that this will cover the loan if they cannot make the repayment.

If lenders were in a position that they could recover money from non-associated entities, then people would lend sums of money way above the value of the asset held as security. Needless to say, this kind of irresponsible lending is not something we want to be encouraging!
 
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